U.S. regulators proposed guidelines for approving the first lower-cost copies of biologic drugs derived from living cells in a move that will help cut national health spending by an estimated $25 billion over a decade.

The Food and Drug Administration will require laboratory and clinical studies to show that the generic versions, known as biosimilars, are “highly similar” to the originals, the agency said in a draft document posted today on its website.

Generic-drug companies led by Teva Pharmaceutical Industries Ltd. and Novartis AG’s Sandoz division had urged the FDA to create a pathway to start reviewing biosimilars as required by the 2010 health-care law. Access to lower-cost versions of biologic medicines for cancer, arthritis and rare diseases will save $25 billion in the 10 years after the copies are available, the Congressional Budget Office estimates.

“When it comes to getting new biosimilar products on the market, FDA has taken an innovative approach to supporting their development at every step of the process,” Janet Woodcock, director of FDA’s Center for Drug Evaluation and Research, said in a statement.

While low-cost copies of biotech drugs are used in Europe, none has yet been approved in the U.S. The law requires the FDA to establish a review process for the treatments that may cut costs for public health programs like Medicare about $7 billion in a decade, according to the Congressional Budget Office.

“These draft documents are designed to help industry develop biosimilar versions of currently approved biological products, which can enhance competition and may lead to better patient access and lower cost to consumers,” Woodcock said.

$5.6 Billion Market

About $80 billion worth of biologic drugs will lose patent protection by 2013 and face competition from biosimilars that may earn $5.6 billion worldwide, according to a 2009 report from Research and Markets, a market data company in Dublin.

Biologics, often delivered by injection, are more complex and typically more expensive than so-called small-molecule drugs derived from chemicals.

While regular generic drugs must have active ingredients that are chemically the same as the originals, biologic molecules may be too large and complex to replicate, said Rachel Sherman, director of the Office of Medical Policy in the FDA’s Center for Drug Evaluation and Research. Biologics are generally made from living systems and can also be made synthetically, she said.

“Sameness does not play a role in the determination here,” Sherman said. “It’s really how close” the copy is to the original, in terms of safety, purity and potency, she said today on a conference call.

Awaiting Applications

While no companies have filed for FDA approval yet of a biosimilar, the agency has received nine applications to conduct human clinical trials on the drugs, Sherman said. The agency also has had 21 meetings with companies seeking to develop biosimilars.

“This is a completely new paradigm,” Sherman said. “I don’t know when we’re going to receive our first application. We’ve been open for business since March 2010.” The FDA will aim to decide on each application within 10 months -- as it does for most new drugs.

Companies seeking to offer biosimilars must submit data from analytical studies, such as protein mapping, to show that the product is highly similar to the original drug, according to the guidance document. While most applications also will require animal and human studies, those requirements may be waived in some cases, Berman said.

The draft guidelines are an important step toward delivering “affordable, lifesaving medicines” to doctors and patients, the Washington-based Generic Pharmaceutical Association said in a statement.

“We look forward to continuing to work with the agency to ensure that a regulatory mechanism is developed that does not serve as a barrier to competition, but rather would ensure the robust competition needed to lower costs and spur future innovation,” the group said.